JoePa Industries recently bought a new plant for $15 million and expects cash flows generated from the investment in the next four years to be: $10 million, $12 million, $15 million, and $10 million. Using a discount rate of 8.0%, calculate the company’s NPV (rounded to the nearest million).
$33 million
$24 million
$44 million
$14 million
$13 million
Initech invests in a new plant for $150,000. The investment is expected to generate cash flows in the next 3 years of: $55,000, $75,000, and $95,000. Calculate the IRR of the project.
12.0%
19.5%
21.1%
15.6%
4.0%
JoePa Industries recently bought a new plant for $15 million and expects cash flows generated from the investment in the...
Mimi makes a payment of $3,100 a year on her car. At the end of 10 years, she’s paid off her initial $20,000 loan. What was her approximate interest rate? 6.10% 8.88% 7.94% 20.56% 7.73% Eddie plans on retiring in 20 years by purchasing a house on the coast. He estimates he will need $1,500,000 saved at that time and is starting now. What payment would Eddie need to make yearly into a savings account with a tax-rate of 35%...
State College LLC recently bought a piece of machinery for $25 million and expects cash flows generated from the investment in the next three years to be: $9 million, $14 million, and $18 million. Using a discount rate of 10%, calculate the NPV of the investment (rounded to the nearest million).
You are considering opening a new plant. The plant will cost
$97.4 million upfront and will take one year to build. After that,
it is expected to produce profits of $28.5 million at the end of
every year of production. The cash flows are expected to last
forever. Calculate the NPV of this investment opportunity if your
cost of capital is 7.5%. Should you make the investment? Calculate
the IRR. Does the IRR rule agree with the NPV rule?
......
Dunder Mifflin invests in a new warehouse for $250,000. The investment is expected to generate cash flows in the next 3 years of: $70,000, $90,000, and $110,000. Calculate the IRR of the project.
You are considering opening a new plant. The plant will cost S98.1 million upfront and will take one year to build. After that, it is expected to produce profits of $30.9 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.3%. Should you make the investment? Calculate the IRR. Does the IRR rule agree with the NPV rule? Here...
You are considering opening a new plant. The plant will cost $ 101.8 million upfront and will take one year to build. After that, it is expected to produce profits of $ 30.5 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.9 % . Should you make the investment? Calculate the IRR. Does the IRR rule agree with...
You are considering opening a new plant. The plant will cost $ 104.4 million upfront and will take one year to build. After that, it is expected to produce profits of $ 28.6 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.7 %. Should you make the investment? Calculate the IRR. Does the IRR rule agree with the...
How to calculate NPV?
You are considering constructing a new plant to manufacture a new product. You anticipate that the plant will take a year to build and cost $100.0 million upfront. Once built, it will generate cash flows of $15.0 million at the end of every year over the life of the plant. The plant will wear out 20 years after its completion At that point you expect to get 510.0 million in salvage value for the plant. Using...
A new project proposal involves an initial investment of $10 million, followed by cash flows of 2, 5 and 7 million. What is the IRR for this project?
You are considering opening a new plant. The plant will cost $102.5 million upfront and will take one year to build. After that, it is expected to produce profits of $29.5 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.8 %. Should you make the investment? Calculate the IRR. Does the IRR rule agree with the NPV rule?...